Good morning. Some of their tactics may change, but most CIOs remain committed to their cloud strategies despite the threat of cyberattacks. For many, the heightened security threats merely exemplify the types of issues they’ve already built into their cloud adoption plans. Rob Lux, CIO of mortgage giant Freddie Mac, says he’ll continue using a mix of cloud and on-premise applications on a case-by-case basis. When it comes to customer financial data, for instance, “we generally prefer to keep it as close to home as possible,” he tells CIO Journal.

Next up: security in social and mobile. A new survey by business consulting firm Protiviti Inc. shows that CIOs feel the need to up their game when it comes to social media security. Vulnerabilities in social media platforms were highlighted earlier this week by hacks to the Twitter Inc. accounts of Burger King Inc. and Jeep. As social and mobile media moves from the marketing department to core business functions like sales, the “IT department is having to take more responsibility to make sure data stored in those platforms is secure,” Protiviti managing director Tom Andreesen told CIO Journal.

Microsoft hopes to get unified communications right this time. Collaboration software is a relatively inexpensive bet on technology that could help employees share documents and communicate more seamlessly across their organizations. But Facebook Inc. is popular because it’s popular, while business social networks are often great for hearing crickets chirp. If the technology were as expensive as, say, sales management software, CIO heads would be rolling in large numbers. But Microsoft Corp. thinks it’s finally got it right by integrating Yammer, the business social networking business it acquired last year, with its Office 365 productivity suite. Adam Pisoni, a co-founder of Yammer and now general manager of Microsoft’s Office division, says the idea of selling the technology piecemeal was “a flaw in prior thinking.” He believes the integrated Yammer/Office suite, which Microsoft will begin offering March 1, will boost adoption. “The goal isn’t to have this thing we sell that nobody uses,” but to have “better connections between existing products,” he told CIO Journal during a phone interview Thursday. CIOs remain believers — Ron Utterbeck, CIO of General Electric Co., says his organization is “seeing people delivering solutions faster and not going through the trial and error period,” thanks to an internal collaboration tool — but challenges remain. Ultimately, as Mr. Pisoni admits, ”Social is not a technology problem, it’s a change management and a cultural problem.”

TECHNOLOGY NEWS

H-P’s numbers buy CEO Whitman some breathing room. Hewlett-Packard Co.‘s first-quarter earnings declined 16% as the technology giant continued to see weaker sales across all its divisions, including its core personal computer business, reports the WSJ’s Ben Worthen. Shares nevertheless soared in after-hours trading as H-P’s numbers beat Wall Street estimates. The company, which is in the middle of a turnaround as the PC market continues to head south, also provided upbeat sales guidance for the current quarter. “The results if nothing else buy Meg Whitman and her team some time to quiet the critics who say… HP should be split into two or more companies in order to unlock value,” writes All Things D’s Arik Hesseldahl.

Google unveils Chromebook Pixel touch-screen laptop.Google Inc. on Thursday unveiled the first touch-screen laptops powered by its Chrome operating system—the latest foray into hardware development for the company best known for its Internet search and mobile software, reports the WSJ’s Amir Efrati. The new high-end Chrome device, which is called the Chromebook Pixel and went on sale Thursday, was designed and built by Google with help from a hardware partner in Taiwan. Sundar Pichai, the top Google Chrome executive, acknowledged at an event in San Francisco that it might take people some time to get used to using a touch screen on laptops. But he said it would improve the way they scroll up and down on a Web page, swipe to move through online photo albums or view sites such as Google Street View, which shows panoramic images of city streets.

Einhorn presses case against Apple. In a public conference call yesterday David Einhorn, Greenlight Capital Inc. founder and current Apple Inc. gadfly, detailed his plan for Apple to issue a new preferred stock that would pay 50 cents per quarter in dividends indefinitely, the WSJ’s Jessica E. Lessin and Telis Demos report. Mr. Einhorn’s proposal comes as investors look for higher-yielding investments in a low-interest-rate environment. Mr. Einhorn earlier this month sued Apple to stop a shareholder vote on an Apple-supported ballot requiring the company to get shareholder support before issuing preferred stock. Apple CEO Tim Cook called the lawsuit a “silly sideshow.”

IBM promises big mobile spend. International Business Machines Corp. announced changes to its mobile strategy committing more employees and resources to mobile technology as it doubles its investment there, reports Bloomberg’s Sarah Frier. The company also said it was working on a new data analysis tool that helps businesses track how employees are using smartphones.

Samsung copies BlackBerry Playbook.Samsung Electronics Co. is taking aim at Research In Motion Ltd.’s still-formidable grip on the world’s most security-conscious government and corporate clients, the WSJ’s Will Connors writes. Samsung is wooing chief information officers and government agencies, promising its phones—which run off Google’s Android operating system—are just as secure as BlackBerrys. It has hired dozens of executives and salespeople from rivals and from mobile-security companies, while investing in other smaller, mobile security and data firms. Still, Samsung has a way to go in convincing some corporate clients. Rich Aducci, the CIO at Boston Scientific, a medical-device maker, has ordered Samsung devices for simple tasks, like checking patients’ glucose levels. But he isn’t yet ready to open the company’s networks more broadly to the devices. “Ultimately, it’s still running Android, and there’s a limit to what they can do about security,” Mr. Adduci said.

Lawyers from Microsoft and Oracle speak up for software patents. Lawyers from Microsoft Corp. and Oracle Corp. Thursday asked Congress not to limit legal protection of software patent holders. “We have a patent system that has important strengths but it also has some significant weaknesses,” Microsoft General Counsel Brad Smith told Bloomberg’s Susan Decker. “We need to fix what’s broken but be careful so we don’t break what’s working. It’s all about striking the right balance.” Congress is looking at ways to limit some of the litigation that has plagued the industry. Earlier this month President Barack Obama admitted that patent legislation he signed in 2011 “hasn’t captured all the problems.”

Apple’s submits iWatch patent. The U.S. Patent & Trademark Office yesterday published an Apple patent application with details on the ” iWatch,” a wearable computer, recently reported by the WSJ’s Jessica Lessin. The patent includes details on a flexible touchscreen display and hints at the possibility of a solar-based or kinetic power source. In the patent Apple also says it is considering “slap bracelets” as inspiration. Consisting of flexible steel brands encased in a fabric or pliant material, slap bracelets take the shape of a wearer’s wrist when slapped against it. The Patently Apple blog has a detailed summary of the patent.

NBC.com malware prompts Facebook to block access. Facebook Inc. blocked access to NBC.com yesterday after security bloggers warned that the network website was hosting malicious malware, Reuters reports. Researchers at Fox-IT, a Netherlands-based security firm said Thursday that NBC.com linked to malware used to target U.S. financial institutions. NBC later said that the site was safe to visit.

Technology industry seeks fashion sense. Googleis negotiating with a trendy eyeglass start-up about helping it design its Google glasses. Google joins companies like Apple, Nike Inc. and Jawbone, maker of a health-tracking wristband designed by Yves Behar—a well known designer, the NYT’s Claire Cain Miller informs us—all striving to create wearable technology that does not look dork-ish.

WHAT YOUR CEO IS READINGEvery week, CIO Journal offers a glimpse into the mind of the CEO, whose view of technology is shaped by stories in management journals, general interest magazines and, of course, in-flight publications.

Board governance depends on where you sit.The practice of entrusting corporate governance to a roomful of successful, smart and opinionated individuals–some with no relation to either the company or even the industry—can seem like an ill-fated attempt at herding cats. Indeed, the best media accounts of some dysfunctional boards have more twists than a telenovela. William George, a former CEO of Medtronic Inc. and a veteran of 10 corporate boards, writes in the McKinsey Quarterly that the best boards make efforts to acknowledge different viewpoints and work to minimize conflicts that arise from them. Board members gain from understanding that their perspective—and that of every other board member—is influenced by the seat they hold. “All parties, but especially CEOs, should acknowledge different points of view and work to minimize the conflicts that inevitably arise from them,” George writes. “This requires high-level listening skills, the ability to see situations from the other person’s perspective, and the wisdom to understand the basis for the different points of view.”

The art of cyberwar. Now that China’s cyber war fighting potential has been documented in White House press briefings, should we fear a cyberattack? “Even if the Chinese could pull off such a feat with one keystroke,” writes Slate’s Fred Kaplan, “it’s hard to imagine what they’d accomplish, especially since their fortunes are wrapped up with our own.” China’s cyber-feats could be considered leverage in what war gamers call “escalation-dominance,” where one party, knowing the expected outcome of the next round, decides not to escalate. For example, China could bet that the U.S. would not intervene in a Taiwan conflict if it knew that its power infrastructure was at risk. Given the U.S.’s dependence on the Internet, the threat of an American “retaliation in kind,” doesn’t seem as effective as it might for preventing nuclear war. But Kaplan sees another relic of the nuclear age, intense international diplomacy, as a means to stave off cyberattacks. “It’s sheer silliness, at this point, to keep cyber issues off the table for fear of upsetting the sensitivities of Chinese officials (who deny that they have offensive cyberwarfare programs) and thus possibly triggering a diplomatic crisis,” writes Kaplan. “A crisis already looms from all sides of the globe… Best to deal with it head-on, and soon.”

Some victims of online hacking edge into the light. Over the last couple of weeks, news of cybercrime has spiked, with Facebook, Twitter Inc. and Apple among others, admitting to security breaches. “This is a particularly good time to get out the fact that you got hacked, because if you are one of many, it discounts the starkness of the announcement,” the director of research at the SANS Institute tells the NYT’s Nicole Perlroth. But the recent trend does not foretell a cyber-Glasnost. Many victims of cyberattacks remain close-lipped. BP PLC, Coca-Cola Co., Exxon Mobile Corp. and Chesapeake Energy Corp. have all been the subject of speculation that they have been hacked, yet none have admitted to any breach. Perlorth talks to Steve Elefant, chief information officer for payment processor Heartland Payment Systems which, way back in 2009, took the then-unusual path of informing customers of a breach. Heartland also created a mechanism to share information about security threats within the industry. Both steps were made against the advice of its lawyers. “There are an awful lot of lawyers out there trying to keep companies from exposing that these breaches are happening. And they are happening.”

EVERYTHING ELSE YOU NEED TO KNOW

End of payroll tax holiday whacks business. Retailers and consumer-goods companies are seeing a big financial hit from the expiration of the payroll tax holiday. Wal-Mart Stores Inc, Burger King, Kraft Foods Group Inc. and other companies are slashing forecasts and adjusting sales and marketing strategies, expecting consumers with smaller paychecks to eat out less frequently and shop for cheaper products, write the WSJ’s Shelly Banjo, Annie Gasparro and Julie Jargon. “When people look at their paycheck and see less money, it obviously impacts their mind-set about spending,” Burger King CFO Dan Schwartz says. The end of the tax holiday has knocked 2% off consumers’ take-home pay and will shift an estimated $110 billion overall out of consumers’ hands. Around 45% of consumers are cutting their spending, according to a survey by the National Retail Federation. A quarter are putting off big-ticket purchases, a third are reducing restaurant visits.

More contraction forecast for euro zone. The European Commission expects the euro-zone economy to shrink for a second year in 2013, driving unemployment higher as governments, consumers and companies curb spending, Bloomberg reports. The commission forecasts that GDP will fall 0.3% this year, compared with a November prediction of 0.1% growth. Unemployment is expected to climb to 12.2% — up from the previous estimate of 11.8%. Europe’s labor market “is a serious concern,” Marco Buti, head of the commission’s economics department, said in a statement. “This has grave social consequences and will, if unemployment becomes structurally entrenched, also weigh on growth perspectives going forward.”

Citi CEO gets $11.5 million pay package.Citigroup awarded CEO Michael Corbat $11.5 million for 2012 and outlined a new pay plan that ties compensation to stock performance and return on assets, the WSJ’s Suzanne Kapner reports. The new plan was announced after the WSJ reported that Citigroup is shelving an unusual executive profit-sharing arrangement that upset investors following its adoption in 2011. Citi’s moves come as Chairman Michael E. O’Neill tries to avoid a repeat of last spring’s “say-on-pay” vote defeat – Citi was the only major lender to have its plan rejected by investors. The new compensation plan says that 30% of pay for top executives, including Mr. Corbat, come in performance share units that are delivered after three years, depending on the company’s performance over that span. Other executives eligible for the performance-share units include CFO John Gerspach and Manuel Medina-Mora, a co-president with oversight of global consumer banking.

GE CFO: Focus is on lowering costs. General Electric CFO Keith Sherin said his company plans to cut jobs and close facilities, while using some of the proceeds from its NBCUniversal stake sale to accelerate restructuring, the WSJ reports. “For us, our focus is on lowering our costs” through the restructuring, Mr. Sherin told a Barclays conference in Miami, Fla. He didn’t specify the number of any planned job cuts or identify facilities that will be closed. But he said the company sees a “heavy opportunity” for cost cuts as it continues streamlining its energy-related businesses as well as in its health-care division.

P&G CFO talks productivity, cost-cutting.Procter & Gamble Co. Chief Financial Officer Jon Moeller said the company is adding 200 million consumers per year in developing markets and is ahead of schedule in its plan to cut $10 billion in costs by 2016, the Business Courier reports. About 5,850 jobs have been cut so far, and P&G expects to cut management and administrative expenses by 2% to 4% a year, Mr. Moeller told the Consumer Analyst Group of New York conference in Boca Raton, Fla. Productivity “creates financial flexibility to pursue more growth. It empowers people to think differently about how things are done. And it provides a cushion to protect bottom-line growth even in a challenging macro environment,” he said.

CORRECTION: An earlier version of this article misspelled the name of Protiviti Inc.

In this second article in a two-part series, Sonny Garg, senior vice president and chief information and innovation officer at Exelon Corp., the $27.4 billion competitive energy provider based in Chicago, describes the structure and inner workings of his emerging technologies team.